Possum TB Vaccine Is Stupid

Landcare Research are trialling a tuberculosis vaccine for possums. It hard to think of a more ridiculous waste of money. If possums can be given a vaccine, then they can be killed or poisoned.

DCC Answers Your Prayers

The Dunedin City Council Propaganda Department has outdone itself this time.
Your prayers have been answered if you have prayed for:

• An increase in parking fees
• Paid parking in areas which previously were free
• Paid parking at times which were previously free
  

Bus Route with Empty Buses Canned

The "City Loop" bus route, which has averaged one passengers per trip, has finally been abandoned by the Regional Council. I have advocated for this service to be stopped, at the last two years Regional Council Annual Plan hearings. $400,000 has been wasted on this route: it should have been terminated long ago. Attention should also be paid to other poor-performing routes. If few people are using a bus, then the Regional Council should not be subsidising it.

DCC Wise To Fix Stadium Loan

The DCC has locked in $90 million, of the $109 million Stadium loan, at 6.4 % from 2011 to 2016.
This is a wise move as interest rates are rising steadily, and seem certain to continue rising, due to massive borrowing from Governments world-wide to pay for their "stimulus" spending.
The Stadium loan is for 20 years so there is still an interest rate risk after 2016, but the Council move is the best that could be done.

Mid-Winter Lantern Parade Photos

Eckhoff Opposes Waterfront HQ

Otago Regional Councillor, Gerrard Eckhoff, has an excellent article in the ODT, opposing the building of of the new Regional Council HQ on the waterfront.
He challenges the claim the money will not increase rates:

The proposed office block on the harbour basin is to be funded from reserves.
While the proponents of the new harbour site building argue it will not affect rates, there is an opportunity cost to the use of ratepayer reserves, which can be spent, saved or used in many ways.
The ORC effectively had a choice to fund the stadium ($37.5 million) or the proposed new building ($34 million) out of reserves.
Either way, the run-down in reserves will no doubt be rebuilt over time, so the rate take will need to continue at the current levels.

And comments on the Waterfront weather:

Some believe the enhanced amenity value to Dunedin's public will offset the significant cost in building on such a site.
Comparisons have also been made with the Auckland Viaduct Basin, which super-yachts and the America's Cup (briefly) call home; and where a thriving café culture exists in the almost subtropical climate.
Dunedin has no such opportunity, given the east wind off the harbour makes itself felt most days.

I am can comment on the Waterfront climate as much as anybody as I have worked in the Port Otago Building for the last ten years, cycling to and from St Clair most days. The micro-climate of the Waterfront is windy and cold. I often have to put my jacket on when I leave work, but take it off again when I reach St Clair because I am hot. The cafe scene at St Clair has thrived with crowds regularly enjoying the outdoor tables. But you rarely see people outside at the Customhouse.
The Queenstown Lakes District Council has the right idea, shelving their plans for a $30 million HQ.

More On Otago Rugby's Bailout

Following on from the letter from Calvin Oaten last week, this week's Dscene has a story saying Carisbrook will be sold to the Dunedin City Council for $7 million.

Dscene asked an experienced property valuer for an estimate of Carisbrook's worth and was given an off-the-cuff figure of "ballpark $4 million".

But $7 million will enable Otago Rugby to pay off it's debts. DCC chief executive , Jim Harland, has said:

The council’s concern is to ensure the ORFU is in a viable financial position looking into the future.

If Dscene's $4 million is correct, then Dunedin rate-payers are bailing out Otago Rugby to the tune of $3 million.
Today the ODT, also has a story: "Carisbrook Deal believed to be $7 m" (but does not acknowledge Dscene's scoop).

Mr Harland said the sale price was not included in the $198 million cost of the new Forsyth Barr Stadium, and was "based on" a market value agreed after the council sought "valuation advice".
Mr Harland would not say whether the price was inflated beyond market value to help the ORFU clear its debts. "I can't comment on that question. I'm not saying no, and I'm not saying yes."

Note that it is "valuation advice", not a valuation.
Factors which have reduced the market value of Carisbrook include:

• The currently depressed property market, particularly for development land
• The difficulty of obtaining finance
• Rising interest rates due to world-wide Government deficits
  
• The cost of demolishing the existing structures
• The involvement of the Historic Places Trust
• The industrial zoning of the site
• The two-year wait for Otago Rugby to vacate the site

There are still many questions to be answered:

• How will the Council fund the purchase?
• Will the rent paid by Otago Rugby cover the operating and holding costs?

Watch this space.

DCC Bails Out Otago Rugby

The Dunedin City Council has admitted that a reason that the DCC is buying Carisbrook is to resolve Otago Rugby's financial situation.

Calvin Oaten's letter to the ODT:

In all the triumphal utterances of the Carisbrook Stadium Trust, the Dunedin City Council and general supporters of the proposed stadium, one important matter seems to have slipped under the radar. Neither the DCC nor the plentiful opponents have made much of the fact that the DCC has purchased Carisbrook from the Otago Rugby Football Union. Why? Is it not a very pertinent point of the whole debate?
Indeed, why did the DCC need to purchase it at all? Surely, if the ORFU needed to sell it, why did it not simply go on the open market? I fail to see what value there is for the citizens intaking ownership of a stadium about to be made redundant by the very same representatives of those citizens.
Some serious questions need to be answered by the DCC chief executive is Jim Harland:
• Why did the DCC buy Carisbrook?
• What price did the DCC pay?
• Did the price agreed take into consideration the $2 million debt that the ORFU owes the DCC?
• Was the purchase-price factored in as part of the budgeted $198 million cost ofthe Awatea St stadium? If not; why not?
• What use does the DCC see for the purchase and what costs are budgeted for in order to demolish existing improvements, thus making way for reuse or sale of the site?
• Did the purchase include the ORFU’s other properties on Burns St and parking areas on Neville St?
These questions are essential details which the public are entitled to know if they are to be able to assess the value of the council’s decision to make the purchase. After all, we have just seen where the relative land purchases at the Awatea St site cost $35.6 million, up from an original estimate of $15 million. A full explanation of the above points at the earliest convenience would be appreciated.

Jim Harland, chief executive, Dunedin City Council, replies:

Why did the DCC buy Carisbrook?
To assist the ORFU as anchor tenant in the new stadium and to secure a piece of industrial land for the future of the city.
What price did the DCC pay?
This information is confidential until negotiations have been concluded.
Was the purchase price factored in as part ofthe budgeted $198 million cost ofthe Awatea St stadium?
No. The council’s concern is to ensure the ORFU is in a viable financial position looking into the future.
What use does the DCC see for the purchase and what costs are budgeted for in order to demolish existing improvements, thus making way for reuse or sale of the site?
No decisions have been made on the future use ofCarisbrook. The modelling prior to purchase took into account likely demolition costs.
Did the purchase include the ORFU’s other properties on Burns St, and parking areas on Neville St?
Yes.

Risks of Council Debt

Yet another great post from Calvin Oaten on ODT online, on the risks of Council debt
I think that the biggest risk facing the heavily-indebted Dunedin City Council is rising interest rates. When the projected cost of the Stadium blew out by $20 million, the Council conveniently reduced the interest rate it expected to pay on the loans from 9% to 7%, saying that there would then be $20 million less interest to pay. But, because of the massive borrowing presently required by Governments around the world, long-term interest rates are rising steadily. Dunedin ratepayers have good reason to be worried.

Neil Ashby on Building Consent Fees Gravy Train

A Letter to the ODT by Neil Ashby:

Many of us occupied in the building industry are dismayed at the ease with which the Dunedin City Council notifies the monotonous requests for hikes in the cost of building consent fees (ODT, 3.6.09).
These fees have been aggressively increased annually over the past 10 years at least, although a precedent was set in this current year — they actually increased twice. The increase this time was 25%. How nice it would be if those of us active in the private sector ofthe industry could increase our charges in such increments and at such regular intervals.
A graph showing inflation and DCC consent charges over the past 10 years would clearly illustrate how outrageous the evolving situation is becoming.
Those members of the Dunedin public contemplating doing a $150,000 alteration/addition to their home will now face a base fee, for the building consent to do that work, of approximately $5200 (i.e., after these new increases are implemented). If you had a house in Waihola (under the jurisdiction of the Clutha District Council), the equivalent fee would be $1288.
One of the feeble reasons given for the installation of this last increase was that they wished to regain revenue due to the lower number of, and the lower value of building consents currently being issued. I wonder if the DCC has given any consideration to the possibility that one ofthe reasons there is currently less building work being proposed might be that the accumulation of costs local government has levied on building work may be putting building beyond reach of many consumers.
It should be understood also that building-consent fees are set proportionately to the value of building work to be done. Given that building work generally increases in cost with the effects of general inflation, that in effect provides the council with an ongoing revenue increase. There should be no need for additional adjustments to the "gravy train" discharge values.